The Politics of Housing

The Politics of Housing is necessarily societal. In other words you can’t divorce housing from politics.

When canvassing for the Brexit vote in 2019 and accepting becoming our Prime Minister in July 2019, Boris Johnson promised that his government would be a government inclusive for all in society, having won the popular vote on that basis.

Whatever political view an individual may wish to take, it would appear that there are three institutions that should be held as being at the very crest of present day society. These are The Judiciary, The NHS and The Town and Country Planning Acts.

Whenever setting out to make new policy for the benefit of Britain’s populace, these three established pillars of fairness should always be fully considered beforehand.

Tough love, directed towards some parts of society, may be necessary for further improvement but it would, by its own definition, have to be based on love and nurture, not prejudice.

However even so, the noblest of decisions, taken in the quest to improve the lot of the many may occasionally fail, especially where housing is concerned.

What follows is a set of proposals specifically designed to resolve our present housing distribution problems.

FIRSTLY: Before designing a new Town & Country Planning system for the whole of Britain, it would be a pretty good idea to get a clear picture of what would make each local community thrive, and then incorporate precisely that into the new model.

To date we have seen little evidence of such an approach and practically no justification for the arbitrary zoning designations which are being proposed in the Planning White Paper currently being debated in Parliament. This does therefore deserve much further consideration.

The clear and over-riding objective must surely be for ordinary working people to be able to find openings for good new jobs close to where they may live.

This must mean the forward plan must involve a proper debate with business leaders to start searching for and employing more-skilled people, including training them up and paying them substantially more whilst expecting more productivity/profitability from them in return.

The resultant gain to industry could be achieved from increasing the incentive amongst school leavers and university graduates alike to decide on a higher-skilled career for themselves, earlier, and then to train more intensively for that.

Those youngsters who do not choose to follow this path would be likely to have to accept whatever unskilled jobs there may be at low wages (and with little or no prospects), of course.

This is, in effect, increasing the requirement on job seekers to decide what they would like to do earlier and to embark on getting the best training and qualifications they need for their choices of career.

Other successful economies have already achieved such outcomes and because this has been done elsewhere it could certainly be done in Britain if the incentives were provided.

One organisation, KPMG (the accountancy conglomerate) is already in the news for helping in the battle for greater diversity among types of job especially within the poorer communities by offering apprenticeships. It wants nearly a third of their staff to be coming from working class backgrounds by 2030. Enabling diversity of perspective, fresh thinking, and wide-ranging insight should help all businesses to perform.

People from routine maintenance and service organisations may apply. Levels of pay and prospects in life really matter to employees but so does aspiration. Van drivers, butchers and factory workers should be among those applying for schemes such as these if they should wish to do so.

What is Levelling Up really about?
Added to this post 2 jan 2022:

Levelling up is about empowering local leaders and communities.
It’s about raising living standards and growing the private sector.
It’s about spreading opportunity and improving our public services.
It’s also about boosting local pride and improving our local environments.

Young people should be empowered to learn all the skills they need and be enabled to use their passions and their abilities to help them get good jobs in the future wherever they may choose to live.

All this is can now be achieved with the localised Towns Deals which are being made available by government as well as the Community Renewal Fund and other funds also to do with Levelling Up.

Link to: Department for Levelling up Housing and Communities

Equally important however is the house price crisis itself!

To find out all about everything to do with the extreme lack of adequate and available housing on the market and how to deal with the non-affordability of it, see below.

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

The Cure For The Malady Across All British Housing Markets

The cure for the malady across all British housing markets is to use a combination of two cures, in a similar way to a doctor using two specific antibiotics to cure a bacterial infection.

The expertise required to achieve that would involve first acquiring an accurate knowledge of the causes of such infections and following this, the ability to diagnose the correct medicinal cure for the specific infection involved.

It is of course imperative to be able to understand precisely how and why a specific illness or malaise will have occurred. Only then can the correct medicinal cure be prescribed.

Peter Hendry says, “I can explain in simple terms why house prices are continuing to rise despite the increasing lack of affordability affecting ever more prospective buyers.”

In a nutshell, the housing market should find the values of houses in a quite specific way.

The true value (or the correct buy price), of any house being offered for sale should be arrived at by adding THREE separately-assessed components together:

1 The land value – which depends in part upon location.

2: The construction cost (including a profit element to the builder or developer).

3: A further amount of equity or profit produced as a result of having combined these two.

These are the things that a sensible buyer should theoretically be considering, even if only subliminally.

All too often however, anxious buyers will base their offers on a combination of how much they could possibly afford and borrow, together with knowing the asking price being quoted.

What makes this task particularly difficult to quantify is that house prices in today’s housing marketplaces are not derived in perfect market conditions at all. The reason for this is because in a perfect marketplace, the whole amount of homes on the market would be sold and the demand for them would also be fully satisfied at all times.

Instead, the present day housing markets have large overruns where, either there is too much property being offered at any one time or alternatively, there are too few properties being offered to purchasers.

Both extremes are most unsatisfactory for prospective purchasers of houses in the regional marketplaces and especially in tourist and second-home prevalent communities.

Unfortunately, current day estate agency does not assess house prices in the way described just now. Instead they peg asking prices at the level they might simply guess they could sell a house for but also they may well often include what their client (the seller) might hope to achieve when determining an asking price!

Worse, they base their asking prices on what other asking prices are, including what the other recent sales will have achieved, albeit these would have used skewed marketing comparisons themselves for the reasons just set out.

To justify what is being explained here, a year ago for example a typical estate agent had 37 properties available and 379 applicants on their register (according to statistics published by the NAEA). Today, after a spirited first half of the year and after COVID has started to reduce, a typical estate agent apparently has just 23 live listings and over 400 applicants on their register.

If knowledge such as this were to be broadcast, it would skew prices-levels downwards whilst the market is flush with houses for sale and it would skew prices-levels upwards when there were not enough houses coming onto the market – as now.

In the former case, sadly there is inherent pressure within estate agency to want to hide the true facts of an excess of properties being listed for sale compared with buyers so as not to spook the market and to keep things going as smoothly as possible, rather than face the reality of a downwards-changing market, with prices dipping.

In the latter case however, with too few properties on their books and too many buyers wanting them, broadcasting the lack of supply actually helps agents to justify trying for rising prices even against general economic trends! This has been what’s going on recently of course.

Selling agents may try to argue that it is the desperation of buyers which is forcing the prices up but that does not explain why the housing markets are operating at such low efficiency in terms of completed sales. This shows serious imperfections, resulting in their lack of stability which means these markets are in need of a completely new approach to buying and selling houses.

In my analysis and resultant diagnosis following understanding the true causes of these problems, two specific ways to deal with them emerge.

A: Firstly there should be restrictions on the right to occupy a proportion of houses in each locality as being permanent “Primary Residence” restricted. This would mean these houses would be for use only by local people, such as key workers for example.

Most people seem to agree that each locality absolutely needs housing to be affordable to those fulfilling the essential roles in their community. This should therefore be enshrined in each area’s local planning rules.

Secondly and very importantly:

B: The emphasis on all prices should be changed so that these are set by ‘buyer offers’ rather than seller price-rigging, which is of course not an open market practice in any way if this is carefully scrutinised.

This is where The House Price Solution (formerly described as The Hendry Solution) could come in. It allows for both of the essential changes cited above.

It would do this by re-shaping house sales methods entirely and by including the use of “Primary Residence” restrictions on certain properties.

AND

It would enable all buyers to be free to participate and establish the price levels themselves, (subject to declared “Primary Residence” restrictions, which would be locally established using the local planning rules).

To read more about how The House Price Solution could improve the way in which houses are bought and sold across all local housing markets in the whole country, please click the following link.

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

Buyers need far better representation in the British housing markets

With estate agents acting primarily for sellers and land owners, buyers get poor advice or representation all too often.
Even though they are the ones raising (and usually borrowing) the money for each transaction, they are often the last ones to be told how things are progressing, especially where chains of other sales are involved. A lot of patching up of interlinking chains is frequently going on behind the scenes, which is not necessarily to the advantage of unsuspecting buyers further down the chain. Sale prices at the lower end may require to be re-evaluated.

This is inefficient and ought to be changed otherwise the different local housing markets across England and Wales cannot begin to function more like perfect marketplaces as they should do.

All this happens because estate agents are primarily motivated to try and obtain the best price they can for whatever asset it is they are selling, since they are contracted to act on behalf of the seller. The buyer is often the last person to be told when bids in competition with their own are are being negotiated by the selling agent and then the only remedy remaining for them is to have to find more cash to increase their offer!  It operates rather like a sort of clandestine bidding war usually conducted over a telephone.

House prices as a result, are now passing all time highs but also, they are increasing beyond average couples’ annual earning capabilities for maximum borrowing requirements. This is a big problem especially where earnings are falling. It’s vital that a more generally acceptable approach is available to everyone embarking on house moves, especially if they are first-time purchasers. Purchaser mobility ought to be what should be improved.

The only way this could be done would be to change the way residential property is sold by having agents acting for buyers instead of only acting for sellers.

It is clear that existing estate agents are understandably likely to be reluctant to consider such a change for as long as they can continue to control sales progress in the way they have done essentially since the 1920s.

It would require the buying public to start complaining about the anomalies they are having to contend with when using agents, as well as to prevail upon government to make the necessary improvements to bring about fairer but competitive pricing processes across all residential property markets. Only then could house prices track buyer purchasing power in the localities in which each particular property is located.
The correct solution to this problem does need further in-depth explanation in order for the concept to be fully understood.

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

Simply building more houses can’t solve the housing crisis

Obviously we need to get more houses built, both for rent and to buy but developing this as a strategy for calming the housing market is not going to remedy the prices uplift which we have recently experienced. It cannot do that simply because building more can’t achieve anything for as long as the considerable time it would take to actually complete the building of the extra housing required.

The market itself is in need of intervention and this does require the involvement of government. A government that can put effective policies into practice faster than the simple but over-quoted ‘build more’ idea.

My solution is to overhaul the way in which houses are marketed, both for sale and to let by changing the way agents themselves operate.

A more market friendly method is required so that house prices can be attuned more towards peoples ability to pay, with less of the speculative pricing by agents, whom currently act only for the vendor legally. It is this which requires urgent attention.

A more transparent housing market would not only take the froth out of asking prices but would have the added effect of calming rent levels too. For more information please go to the link below:

My proposal for the way housing in England and Wales should be marketed, is based on changing from vendor-centric estate agencies to buyer-oriented ones as described in The House Price Solution. This would not cost much to implement and would bring massive benefits to all local marketplaces.

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.